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Quality Management System and Practices

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DOI: 10.5772/36671

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 1

Quality Management System

and Practices
Ng Kim-Soon
Universiti Tun Hussein
Onn Malaysia
Malaysia

1. Introduction
Quality is a perceptual, conditional and somewhat subjective attribute of a product or
service. Its meaning in business has developed over time. It has been understood
differently and interpreted differently by different people. A business will benefit most
through focusing on the key processes that provide their customers with products and
services. Producers may measure the conformance quality, or degree to which the
product or service was made according to the required specification. Customers on the
other hand, may focus on the quality specification of a product or service, or compared
it with those that are available in the marketplace. In a modern global marketplace,
quality is a key competency which companies derive competitive advantage. Achieving
quality is fundamental to competition in business in propelling business into new
heights.
Many quality management philosophies, methodologies, concepts and practices were
created by quality gurus to manage quality of product and service in an organization.
These practices have evolved over time to create sustainable sources of competitive
advantage. New challenges faced by managers are addressed to improve organization’s
performance and future competition. In the total quality management form, it is a
structured management system adopted at every management levels that focused on
ongoing effort to provide product or service. Its integration with the business plan of the
organization can exact positive influence on customer satisfaction and organizational
performance.
This chapter dealt with what is quality and TQM, cost of quality, linking quality
management system to organizational performance, its impact on organizations and
approaches of implementing TQM and the quality journey.

2. What is quality and TQM?

The business meanings of quality have developed over time. Among the interpretations of
quality stated by Wikipedia from the various sources is tabled as below:

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4 Quality Management and Practices

Author / Authority/Source Definition

1. ISO 9000:2008, International
Organization for Standardization
2. Six Sigma (Motorola University)
3. Subir Chowdhury (2005)
4. Philip B. Crosby (1979)
5. Joseph M. Juran (American
Society for Quality)
6. Genichi Taguchi (1992)
7. Peter Drucker (1985)
8. Edwards Deming (1986) and
Walton, Mary and Edwards
Deming (1988)
Table 1. Interpretations of Quality
Degree to which a set of inherent characteristics
fulfills requirements
Number of defects per million opportunities
Quality combines people power and process power
Conformance to requirements
Fitness for use
Uniformity around a target value and the loss a
product imposes on society after it is shipped
Quality in a product or service is not what the
supplier puts in. It is what the customer gets out
and is willing to pay for
The efficient production of the quality that the
market expects, and costs go down and
productivity goes up as improvement of quality is
accomplished by better management of design,
engineering, testing and by improvement of
processes

The development of TQM can be traced to several consultants including Crosby, Juran,
Taguchi and Deming. They showed different ways in defining quality. Crosby stresses on
zero defects programme through process improvement to pursuing conformance to
customers requirements. Juran and Deming stress primarily on leadership qualities,
management commitment and involvement to achieve quality goals. Juran emphasizes
symptom cause while and Deming emphasizes on 14 quality points. Taguchi emphasizes on
concept that any deviation from the required specification results in loss and that
organization need to strive to determine and meet customer’s specification. In ISO 9000, it
emphasizes on the need of good documentations, traceability and records keeping.
In managing quality, the focus is not only on quality of product and service itself. It is also
on the means to achieve it. Thus, quality management uses management techniques and
tools in quality assurance and control of processes to achieve consistent quality of products
and services. Many definitions of quality can be found in the TQM literature (Kaynak, 2003,
Shah and Ward 2003, Prajogo and Brown 2004, Prajogo and Sohal 2006, and Ahire, 1997).
Feigenbaum (1991) defines TQM as an effective system for integrating the quality
development, quality maintenance and quality improvement efforts of the various groups in
an organization so as to enable production and service at the most economical levels, which
allows for full customer satisfaction. It is an integrative philosophy of management practice
in an organization for continuous improvement of their product, services and processes. It
capitalizes on the involvement of management, employees, suppliers, and its customers to
meet or exceed customer satisfactions and expectations. Review by Cua, McKone, and
Schroeder (2001) found that there are nine areas of common TQM practices in organizations.
These are cross-functional product design, process management, supplier quality
management, customer involvement, information and feedback, committed leadership,

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Quality Management System and Practices 5

strategic planning, cross-functional training, and employee involvement. Saraph, Benson,

and Schroeder (1989) identified eight areas of primary quality concerns which they called
critical quality factors. These factors of quality management were compiled from an
exhaustive review of articles, books and studies of eminent quality practitioners and
academics. These are the role of management leadership and quality policy; training;
process management; employee relations; product / service design; supplier quality
management; the role of the quality department; and quality data and reporting. They also
identified that managerial commitment to quality combines several functions as one of the
vital imperatives for the success of any quality improvement programme.

3. Cost of quality
Good quality product or service enables an organization to attract and retain customers.
Poor quality leads to dissatisfaction to customers. As such, the costs of poor quality are not
just those of immediate waste or rework and rectification, it is also the loss of future sales
and subsequently the organization performance. The concept of quality costs was first
described by Feigenbaum (1956) as a mean to quantify the total cost of quality-related efforts
and deficiencies. According to Feigenbaum, total quality costs come from prevention costs,
appraisal costs and quality failure costs. The prevention and appraisal costs are the cost of
conformance. Examples of prevention cost are activities in quality planning, statistical
process control, investment in quality-related information systems, quality training and
workforce development, product-design verification, and systems development and
management. Examples that involve appraisal costs include activities in testing and
inspection of purchased materials, acceptance testing, inspection, testing, checking labor,
setup for test or inspection, test and inspection equipment, quality audits and field testing.
Prevention costs arise from efforts to keep defects from occurring at all, while appraisal
costs arise from detecting defects via inspection, test, and audit. On the other hand, cost of
non-conformance is the quality failure costs which are comprised of internal quality failure
and external quality failure. Internal failure costs arise from defects caught internally and
dealt with by discarding or repairing the defective items, while external failure costs arise
from defects that actually reach customers. Prevention of poor quality will reduce quality
failure costs. It can also lead to the reduction of cost due to the need for many non-value
added inspection and appraisal activities costs. Thus, organization needs to evaluate the
costs involved of operating an effective quality management system to ensure an effective
cost effective. In other words, it is crucial for organization to determine the trade-off
between prevention, appraisal and failure costs for a specified level of quality performance
for cost effectiveness so that investments in quality is based on cost improvement and profit
enhancement. Thus, quality costs can serve as a means to measure, analyze, budget, and
predict (Feigenbaum, 1991).
According to Smith (1998), the emphasis on cost, quality and time has generated many
management changes with significant accounting implications with implementation of
strategic initiative such as the use of activity based costing (ABC) on TQM initiative. ABC is
perfectly suited to TQM because it encourages management to analyze activities and
determine their value to the customer (Steimer, 1990). Shepard (1995) suggested that an
economics of quality approach can be integrated with ABC for strategic cost effectiveness.
Many companies found that ABC aligned well with TQM processes (Anderson and

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6 Quality Management and Practices

Sedatole, 1998). Evidence of the context-specific benefit of TQM and ABC was found in case
studies performed by Cooper, Kaplan, Maisel and Oehm (1992) where all five
manufacturing companies studied found ABC and TQM to be highly compatible and
mutually supporting. ABC and other strategic business initiatives complement and enhance
each other, rather than being individually necessary and sufficient conditions for
improvement (Anderson, 1995).

4. Linking quality management system to organizational performance

Sila (2005) reviewed that research works have often link TQM practices with multidimensional
measures organizational performance of both financial and non-financial measures. Kaynak
(2003) reported that TQM practices can directly affect financial performance, it also affect
indirectly on increasing market competitiveness (Chong and Rundus, 2004), innovation (Singh
and Smith, 2004), and productivity (Rahman and Bullock, 2005).
Empirical evidence supports the argument that by focusing on quality, an organization can
substantially improve its performance (Peters and Austin, 1985 and ; Yahya, Salleh and
Keat, 2001). Literature reviews by Lewis, Pun and Lalla (2006) on studies conducted in
different countries including Costa Rica, Thailand, Indonesia, Palestine, Singapore,
Australia, China and Hong Kong indicated that there are 12 criteria for successful
implementation of quality management system. These are quality data and reporting;
customer satisfaction, human resource utilization; management and process quality;
management commitment; continuous improvement; leadership; strategic quality planning;
performance measurement; customers focus; and contact with suppliers and professional
associates. Literature investigation of TQM studies published between 1989 and 2000 by Sila
and Ebrahimpour (2002) found 25 critical quality factors most commonly extracted from 76
studies. Lau, Zhao and Xiao (2004) found that firms that practice TQM have superior
performance in leadership; strategic planning; customer and market focus; measurement,
analysis, and knowledge management; human resource focus, process management, and
business results.
While a substantial body of literature has been developed linking TQM system to business
performance, Kim-Soon and Jantan (2010) reported that there is a dearth of evidence of
comparing the soft factors and hard factors and its impact on business performance between
big firms and the SMEs. Thiagarajan and Zairi (1997) regarded that systems, tools, and
techniques such as quality management systems, cost of quality and statistical process
control and external effectiveness (e.g. benchmarking and customer satisfaction surveys) are
examples of hard quality factors and the soft quality factors are intangible and are primarily
related to leadership and employee involvement. Firms can achieve superior business
performance if they spend their resources towards improving their quality management
system towards enhancement of their soft as well as hard quality factors. SMES should
enhance their quality management to achieve the level of business performance of large
firms (Kim-Soon and Jantan 2010).

5. Approaches of implementing TQM

Implementing TQM can be a tedious journey in an organization. Empirical evidence
supports the argument that by focusing on quality, a business can substantially improve its

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Quality Management System and Practices 7

performance (Peters and Austin, 1985; Yahya et al., 2001). Different approaches are practiced
by organizations to initiate and implement TQM. TQM GOAL/QPC Research Committee, a
nonprofit organization located in the United States of America has documented some of
these approaches described as follow.
- The Guru Approach. This method takes the teachings and writings of one of the leading
quality thinkers and uses them as a benchmark to determine where the organization
has deficiencies and then to begin to make appropriate changes to remedy those
deficiencies. For example, managers would attend Dr. W. Edwards Deming’s courses
and study his “Fourteen Points.” They would then go to work on implementing them.
- The TQM Element Approach. This approach takes key systems, organizations, and tools
of TQM and begins work on them. This method was widely used in the early 1980s by
companies that tried to implement parts of TQM as they learned them. Examples of this
approach included use of specific elements such as Quality Circles, Statistical Process
Control, Taguchi Methods, and Quality Function Deployment.
- The Company Model Approach. In this approach individuals or organizational teams
would visit U.S. companies that were taking a leadership role in TQM and determine
what successes they had and how they had accomplished them. The individuals or
teams would then integrate these ideas with their own and thus develop their own
organizational model which would be adapted for their specific organization.
- The Japanese Total Quality Approach. Organizations utilizing this method take a look
at the detailed implementation techniques and strategies employed by Deming Prize-
winning companies and use this experience as a way to develop a five-year Master Plan
for in-house use.
- The Prize Criteria Approach. Using this model, an organization uses the criteria of the
Deming Prize or the Baldrige Award to identify areas for improvement. TQM
implementation under this approach is focused on Prize criteria benchmarks.
There is no one best way to organize quality management system in an organization as it is
necessary to fit to the needs of the organization concerned. It is like what Scott (1981)
described the contingency approach, "The best way to organize depends on the nature of the
environment to which the organization must relate". The business settings are unique, the
nature of business itself, the organization cultures and people are different from one
another. Thus, the notion of no one right approach of implementation.

6. The quality journey

The journey of quality management never ends. Quality management is evolving and
tomorrow will present a different scenario through adding and discarding practices.
Whether it is a big organization or a small one, producing products or services, it is quality
that matters to the customers. Global market competitiveness and market dynamics are
continuously changing the landscape of managing quality. Competitive advantage requires
constant corporate attention to the latest definition of customer-driven value. Effective
quality management systems are dynamic, adaptable to change in meeting customer’s
requirements and expectations. It can provide guidance for establishing an organization’s
processes for maintaining records, improving processes and systems, and meeting
customer’s requirements and expectations.

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8 Quality Management and Practices

Some recent themes in quality management that have become more significant include
quality culture, the importance of knowledge management, innovation and the role of
leadership in promoting, Kaizen and achieving high quality. Systems thinking are bringing
more holistic approaches to quality. A system approach enables an organization to gain and
retain customers and to improve overall its efficiency and profitability. Many authors have
stressed that operations quality programmes should be both strategic and comprehensive
(Slack and Lewis, 2008). They have also prescribed on how TQM integrate into a business
strategy (e.g. Lile and Lacob, 2008). TQM has been a popular business strategy in many
manufacturing organizations in the past few years (Sohal & Terzivski, 2000). It thus
provides evidence of the importance of TQM practices as an effective pillar of corporate
strategy for achieving organizational excellence. Thus, for quality management to be
strategic, organization needs to commit to an ongoing effort to improve the quality of
products, services or processes to sustain market competitiveness of its product and service.

7. Concluding remarks
Total Quality Management is a management philosophy on how to approach the
organization of quality improvement through the “holistic” approach. The TQM practices
have evolved and improved continually over time to sustain organizational
competitiveness. This chapter has dealt on what is quality and TQM, cost of quality, linking
quality management system to organizational performance, its impact on organizations and
approaches of implementing TQM and the quality journey. For quality management to be
strategic, organization needs commit to a continuous improvement journey to sustain
market competitiveness of its product and service.

8. References
Ahire, S. L. 1997. Total Quality Management interfaces: An integrative framework.
Management Science, 27 (6) 91-105.
Anderson, S. W. and Sedatole, K. (1998). Designing quality into products: the use of
accounting data in new product development, Accounting Horizons, 12(3),
September, 213-233.
Anderson, S. W. (1995). A framework for assessing cost management system changes: the
case of activity-based costing implementation at General Motors, 1986-1993, Journal
of Management Accounting Research, Fall, 1-51.
Chong, V. K. and Rundus, M. J. (2004). Total quality management, market competition and
organizational performance. British Accounting Review, 36, 155-172.
Chowdhury, Subir (2005). The Ice Cream Maker: An Inspiring Tale About Making Quality The
Key Ingredient in Everything You Do, New York: Doubleday, Random House.
Cooper, R., Kaplan, R.S., Maisel, L. and Oehm, R. (1992). Implementing Activity-Based
Management: Moving from Analysis to Action, Montvale, NJ: Institute of Management
Accountants.
Crosby, Philip (1979). Quality is Free, New York: McGraw-Hill.
Cua, K. O., McKone, K. E. and Schroeder, R. G. 2001. Relationships between implementation
of TQM, JIT, and TPM and manufacturing performance, Journal of Operations
Management, 19 (6) 675-694.

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Quality Management System and Practices 9

Deming, W. E. (1986). Out of the Crisis, Cambridge, Mass: Massachusetts Institute of

Technology, Center for Advanced Engineering Study.
Drucker, Peter (1985). Innovation and entrepreneurship, Harper & Row.
Feigenbaum, A. V. (1991), Total Quality Control (3rd ed.), New York, New York: McGraw-Hill,
pp. 130–131.
Feigenbaum, A.V. (1956). Total Quality Control. Harvard Business Review, 34(6).
GOAL/QPC Research Report No. 90-12-02 (1990),12B Manor Parkway Salem, New Hampshire.
Kaynak, H. (2003). The relationship between total quality management practices and their
effects on firm performance, Journal of Operations Management, 21, 405- 435.
Kim-Soon, N. & Jantan, M. (2010). Quality Management Practices in Malaysia: Perceived
advancement in Quality Management System and Business Performance, IEEE
ICMIT Conference, Singapore.
Lau, R. S. M., Zhao, X. and Xiao, M. (2004). Assessing quality and management in China
with MBNQA criteria. The International Journal of Quality & Reliability Management,
21, 699-709.
Lewis, W.G., Pun, K.F. and Lalla, T.R.M. (2006). Exploring soft versus hard factors for TQM
implementation in small and medium-sized enterprises. International Journal of
Productivity and Performance Management, 55(7): 539-554.
Lile, R. and Lacob, M.L. (2008). Integrating TQM into the Strategy of the Business, Fascicle of
Management and Technological Engineering, Annals of the Oradea University.
Vol.VII, (XVII).
Motorola University. "What is Six Sigma?". Motorola, Inc..
http://www.motorola.com/content.jsp?globalObjectId=3088. Retrieved on 01/1/2012.
Peters, T. and Austin, N. (1985). A passion for excellence, Collins, Oxford.
Prajogo, D. I. and Sohal, A. S. (2006). The relationship between organizational strategy, total
quality management (TQM), and organizational performance-the mediating role of
TQM. European Journal of Operational Research, 168, 1-20.
Rahman, S. and Bullock, P. (2005). Soft TQM, hard TQM and organizational performance
relationships: An empirical investigation, Omega, 33, 73-83.
Saraph, J., Benson, P. and Schroeder, R. (1989). An instrument for measuring the critical
factors of quality management, Decision Science Journal, 20: 810-829.
Scott, W.R. (1981). Organizations: Rational, Natural, and Open Systems, Englewood Cliffs NJ:
Prentice Hall Inc..
Shah, R. and Ward, P. T. (2003). Lean manufacturing: context, practice bundles, and
performance. Journal of Operations Management, 21, 129-149.
Shepard, N. (1995). The bridge to continuous improvement, CMA Magazine, March, 29-32.
Smith, M. (1998). Innovation and the great ABM trade-off, Management Accounting-London,
7(5(1), Jan, 24-26.
Sila, I. (2005). The influence of contextual variables on TQM practices and TQM organizational
performance relationships. The Business Review, Cambridge, 4, 206-210.
Sila, I. and Ebrahimpour, M. (2002). An investigation of the total quality management
survey based research published between 1989 and 2000. International Journal of
Quality & Reliability Management, 19(7): 902-970.
Singh, P. J. and Smith, A. J. R. (2004). Relationship between TQM and innovation: An
empirical study. Journal of Manufacturing Technology Management, 15, 394-401.
Slack, N. and Lewis, M. (2008). Operations Strategy, 2nd Edition. Prentice Hall, Financial Times.

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10 Quality Management and Practices

Smith, M. (1998). Innovation and the great ABM trade-off, Management Accounting-
London, 76(1), Jan, 24-26.
Sohal, A.S. and Terzivski, M. (2000). TQM in Australian manufacturing: factors critical to
success. International Journal of Quality & Reliability Management, 17 (2), 158-167.
Steimer, T.E. (1990). Activity-based accounting for total quality, Management Accounting,
October, 39-42.
Taguchi, G. (1992). Taguchi on Robust Technology Development, ASME Press.
Thiagarajan, T. Zairi, M. (1997). A review of total quality management in practice:
understanding the fundamentals through examples of best practice application –
Part III, The TQM Magazine, Vol. 9(6), 414-417.
Walton, Mary, and Deming W.E. (1988). The Deming management method, Perigee. pp. 88.
Wikipedia, http://en.wikipedia.org/wiki/Quality_(business). Retrieved on 01/1/2012.
Yahya, S., Salleh, L.M. and Keat, G.W. (2001). A Survey of Malaysian Experience in TQM.
Malaysian Management Journal, 5 (1&2): 89-105.

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 Quality Management and Practices
Edited by Dr. Kim-Soon Ng

ISBN 978-953-51-0550-3
Hard cover, 254 pages
Publisher InTech
Published online 27, April, 2012
Published in print edition April, 2012

This book is comprised of a collection of reviews and research works from international professionals from
various parts of the world. A practical approach to quality management provides the reader with the
understanding of basic to total quality practices in organizations, reflecting a systematic coverage of topics. Its
main focus is on quality management practices in organization and dealing with specific total quality practices
to quality management systems. It is intended for use as a reference at the universities, colleges, corporate
organizations, and for individuals who want to know more about total quality practices. The works in this book
will be a helpful and useful guide to practitioners seeking to understand and use the appropriate approaches to
implement total quality.

How to reference
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Kim-Soon Ng (Ed.), ISBN: 978-953-51-0550-3, InTech, Available from:
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